The software apocalypse is here. At least, that’s the conclusion you could easily draw with a glance at the markets right now.
It’s a sea of red out there. As Hugo Mathers reported, software stocks in the US and Australia alike have taken a beating — with Xero (-15.9%) leading losses on the local bourse. HubSpot (-10.6%), ServiceTitan (-9.3%), ServiceNow (-7%), Atlassian (-7.7%), Klaviyo (-10.7%), DocuSign (-11.4%) — few have escaped the rout.
It comes at the tail end of a diabolical few months for software more generally. The iShares Expanded Tech-Software Sector ETF — a widely used software ETF in the US — just had its worst month since October 2008. And that was a relatively tumultuous period, as some readers may recall.
Most reporting points to AI lab Anthropic’s new work automation tools as the immediate cause, with jittery investors now reckoning with AI’s potential impact on software businesses. (Have a read of Bronwen Clune’s Sweat Equity today for a view on how some of those tools look from a startup perspective.) Thomson Reuters and other European data firms plunged when Anthropic uploaded a plugin for legal work to GitHub.
